CSC slashes domestic wholesale price by 9% for Q4

Taipei, Aug. 29, 2005 (CENS)--Following the footsteps of mainland China's Baosteel Corp., China Steel Corporation (CSC), Taiwan's largest integrated steelmaker, recently slashed domestic wholesale prices on seven categories of steel products for shipments in the fourth quarter by an average of 9%.

Of the seven product categories, hot-rolled steel coil saw a price decline of NT$2,400 (US$75 at US$1:NT$32), cold-rolled steel coil NT$1,170 (US$36.56), steel plate NT$840 (US$26.25), steel bars and wire rod NT$1,660 (US$51.87), electric-galvanized sheet NT$750 (US$23.43), electrical sheet NT$2,500 (US$78.12), and hot-dip galvanized steel coil NT$1,170 (USS$36.56), per metric ton.

With a sharp decline in domestic wholesale prices and the rise in the prices of such materials as coal and iron, CSC will see pretax earnings slide to NT$25 billion (US$781.25 million) in the second half of this year, NT$7 billion (US$218.75 million) lower than earlier expected. Because of the reduction in the projected second-half earnings, the company is expected to garner NT$67 billion (US$2.09 billion) in pretax earnings this year, still higher than last year's NT$65 billion (US$2.03 billion).

It is expected the price decline will largely benefit many downstream steel firms, including Yieh Phui Enterprise Co., Sheng Yu Steel Co., Kao Hsing Chang Iron & Steel Corp., Chun Yu Works Co., San Shing Hardware Works Co.

Due to the downward adjustment in domestic wholesale prices, CSC estimated it would se monthly sales cut by between NT$1.3 billion (US$40.62 million) and NT$1.4 billion (US$43.75 million).

The company scored NT$6.133 billion (US$19.65 million) in pretax earnings, NT$5.54 billion (US$173.12 million) coming from core business and the remaining NT$590 million (US$18.43 million) from investments, on total sales of NT$15.4 billion (US$481.25 million) in July.